Thu, 08 May 2008

Usually, customers seek the maximum value at all times. This could mean
paying a lot for very high quality, or paying a little for something that
barely suffices. But customers optimize for value -- bang for the buck.

In the American health care system, nobody is optimizing for value.
The patient demands the highest standard of care regardless of the cost.
The insurance company demands the lowest payments regardless of the quality
of the care.

This is totally wrong. We need to move to a system where most people
pay most medical bills out of pocket, and insurance companies step in only
when the costs are completely unaffordable. To get there, we need to eliminate
the deductibility of health care costs. Why should health care be deductible
on income taxes when food is not? Food is way more important
to your health than is a doctor's care. So is exercise, but neither one is
deductible.

We also need to accept that most insurance companies will need to fire
most of their employees, and that doctors' offices will need to fire one
or more employees. On the bright side, consider that that will free up
their labor for production that makes American society better rather
than worse, as is currently the case.